Wednesday, August 2, 2017

AltaGas/Astomos ink deal on Propane exports out of new Ridley facility

Japan will be the first destination for shipments of liquefied propane out of the Ridley Island Export Terminal, as Calgary based AltaGas and Tokyo's Astomos Energy wrap up the details on an agreement on purchase of propane for shipment starting in 2019.

The deal announced on Tuesday will see the Japanese company take one half of the anticipated 1.2 tonnes of liquefied propane gas that will be produced at the Ridley Terminal once it is up and running.

The Japanese market is one which offers much in the way of potential for the Canadian company,
with over 24 million homes in Japan using propane to heat their homes or for cooking, with limited supplies at home, Astomos is looking to AltaGas to help provide for a stable supply.

As we outlined yesterday, progress is moving swiftly on the construction of the Propane export terminal, with land clearing now complete and the foundation for the giant storage tank for Ridley Island now underway.

AltaGas highlighted the Prince Rupert project as part of their second quarter update in late July, providing an update on the timeline of construction, as well as the involvement in the project of the Dutch company Royal Vopak.

At RIPET, crews are currently working to pour the foundation for the propane tank and have assembled the two tower cranes that will be used in the civil construction works. Over the next few months, the propane tank will start to take shape. This involves eight concrete pours with the final pour scheduled near the end of 2017. RIPET is expected to be in service by the first quarter of 2019.

On May 5, 2017, AltaGas announced a joint venture with Royal Vopak, a leading independent tank storage company with a global network of terminals located at strategic locations along major trade routes, pursuant to which Royal Vopak obtained a 30 percent interest in RIPET. As part of the formation of the joint venture, AltaGas will provide construction and operating services to the joint venture. AltaGas has entered into negotiations with a number of producers and suppliers and expects to underpin at least 40 percent of RIPET's annual expected capacity under tolling arrangements with producers and other suppliers.

"We are excited to see all of the development and logistics surrounding our northeast B.C. strategy start to take shape. We are building strong relationships with producers and suppliers that will provide sustainable growth opportunities and benefits for all parties," said Mr. Harris. "We are also excited about our joint venture with Vopak as they are a very strategic global tank storage company and bring significant experience in terminals worldwide. We look forward to working with them on RIPET as well as considering future opportunities to build out our joint venture."

The agreement between Astomos and AltaGas captured the attention of the financial papers, some of their reviews can be found below: